 A buyer’s failure to account for breaches of fiduciary duties by the target’s board can lead to deal execution risk and/or post-closing liability for the buyer once it has acquired the target (together with its attendant liabilities). The authors of this paper discuss steps that may be taken to minimize the risks associated with such breaches, with respect to conduct by the target’s directors and management including...  |
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This session at addressed the give-and-take between buyers and sellers in negotiating key provisions in M&A deals. The participants from Freshfields Bruckhaus Deringer, Linden Capital-backed Young Innovations, W.W. Grainger, and Aon considered recent changes in the tax code and the impact on the forms of consideration. The discussion looked at the use of indemnification “baskets” and “caps,” and the use of escrow as vis-a-vis insurance. This lively session also covered various approaches for matching periods and topping bids given...  |
 By ‘steering’ the company into an allegedly unfair acquisition by a private equity firm that promised to retain him post-acquisition, the target CEO breached his fiduciary duties, found the Delaware Court of Chancery in In re Xura, Inc. Stockholder Litigation. By denying the target CEO’s motion to dismiss claims that he breached his fiduciary duties, the court provided an instructive case for understanding...  |
 In this conversation with publisher William Jefferson Black, Svetlana Vinokur from Federal Signal, explains the importance of the soft side of deal negotiations. She said, “For private company acquisitions, we find that it’s probably 70 percent price and 30 percent those intangibles including the culture, the people, and the legacy. That one of the ways we differentiate our bids". This extensive discussion covers the role of M&A in the corporate strategy and offers unique some insights on...  |
 The authors of this piece highlight three key approaches to averting a broad range of potential issues that often result in post-close disputes; the consistent application of an acceptable accounting methodology, specific example calculations, and dispute resolution process. These specific steps can be used to align deal teams and counsel on the potential pitfalls between the intended language in a sale and purchase agreement and the financial implications associated with...  |
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This discussion explored the unique issues associated with cross-border acquisitions and minority investments. The participants from Mastercard, LyondellBasell, Honeywell, and Shearman & Sterling debated variations in deal structures from the merits of cash or stock offers to methods for balancing U.S. securities laws with changing and conflicting requirements including...  |
 Among the broad trends identified in Mercer’s annual research report on people risks in M&A transactions was that, more than ever, the challenge of managing talent — especially in the face of organizational transition — is what most concerns M&A professionals. The report identifies practical solutions and strategies organizations are deploying to effectively hedge these risks and drive deal value including...  |
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This discussion explored and debated M&A strategy theories and provided a look at the most pragmatic frameworks that can be used to analyze and validate an investment thesis for inorganic growth. Participants from Sheppard Mullin, Cargill, Echo Global Logistics, and a board member at Briggs & Stratton, Nordson and Itron, discussed the use and structure of minority investments, joint ventures, corporate venture investments and...  |
 Special purpose acquisition companies, or SPACs, also referred to as “blank check” companies or “cash shells,” are companies that are incorporated for the purpose of making one or more strategic acquisitions. A SPAC’s management team will identify attractive targets for acquisition or merger, generally within 18-24 months of its IPO. Each SPAC has its own investment criteria and focus, such as....  |
 M&A Methods | Interview with Tom McGee, Vice President of Corporate Development at RPM International In this edition of the M&A Methods video interview series, publisher William Jefferson Black sits down with Tom McGee to discuss changes in the corporate development practice and innovation in M&A. The conversation covered valuation modeling and diligence, paired with instinct and custom research to find optimal deals for RPM. Tom also addressed the importance of...
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 The Delaware Chancery Court issued a rare finding that a Material Adverse Effect (MAE) existed that justified termination of a merger agreement. Cautioning that there is no bright-line test to determine when an MAE exists, the court applied ordinary contract interpretation principles to a heavily negotiated merger agreement and a complex set of...  |
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This session with participants from Marsh & McLennan, Google, and CF Industries explored a range of challenges when deal negotiations are leaked to the media, investors, or employees. Data from the Cass Business School / Intralinks Annual M&A Leaks Report set the stage by providing information on significant pre-announcement trading across a large sample of deals. This research provided the basis for an engaging discussion at the annual M&A Conference at the University of Chicago, which explored...
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